An emerging philanthropic trend: the 'giving circle'

From a modest suite in downtown Charlotte, N.C., Pat's Place operates with a noble mission: to give battered children a refuge.

For director Anne Pfeiffer, who's planning to move the small nonprofit into a 2,400-square-foot house, asking for money has become second nature. But a few months ago, Pat's Place received one of its largest and least expected gifts: a $100,000 windfall, not from a corporate donor, but from a tightly knit group of no-name philanthropists from Charlotte's wine-and-cheese circuit.

In a modern spin on centuries-old "sewing circles," the 157 members of the Women's Impact Fund "giving circle" voted to spend their money protecting children from abuse.

Poor or rich, 20-somethings or retirees, more and more women are forming charitable investment clubs to research, socialize, and give - and in the process, they're revitalizing personal philanthropy, seizing on causes from battered children to relief for tsunami victims.

"For women, especially, this is an opportunity to really have an impact on their communities, to frame a vision, and also gain a hands-on

way to do it," says Mary Lou Babb, cofounder of the Women's Impact Fund. "And, of course, there's a whole social aspect to it."

From Seattle to Boston, "giving circles" are all the philanthropic rage, a swelling category in the landscape of giving. In the past four years, they've gone from just a handful of groups to at least 300, and have donated some $44 million along the way, according to New Ventures in Philanthropy, an arm of the Forum of Regional Associations of Grantmakers.

The rapid growth, say giving-circle members, comes down to a yearning for togetherness and an age-old desire among the financially better-off to address community problems.

With Americans donating less money - and to fewer nonprofits - than they have in 25 years, according to a survey by the Barna Research Group, and with nearly one-quarter of respondents saying they've lost faith in nonprofits, the comfort conferred by group research and communal decisions comes as welcome relief in a crisis of confidence.

It's evidence, too, that "personal philanthropy" is tapping a deeper root, in a nation where nearly 75 percent of giving comes from individuals.

"I think in a country where people feel they know their neighbor less [and] socialize less, giving circles are really getting people back together, and in the process getting people to think collectively," says Darryl Lester, a founding member of a Raleigh-based giving circle called the Next Generation of African-American Philanthropists (NGAAP). "The whole notion that everybody can be a philanthropist moves from theory to practice with the giving circle."

The investment-club model

In essence, the groups work like investment clubs, often gathering at informal potlucks: With a minimum gift per member, the philanthropists do research and, once a month or once a year, vote on which charities will receive a cut of their fund. Contributions can range from $60 to $20,000 annually.

Here in Raleigh, NGAAP, a 16-member coed circle, helped buy renovated computers for after-school programs for poor black students. In Boston, the Kitchen Table Fund, a 14-woman giving circle, recently helped Muslim women immigrants get established in the US. The Tend and Befriend circle in Sacramento mixes "girl time" with good deeds. Most recently, the group spent a day wrapping presents for homeless people in the city. "Girls in the group have pet volunteer projects they put forward," says Susan Hatler of Elk Grove, Calif. "It's not work, but a good time, and we're doing something good at the same time."

The allure of such groups at times resembles that of the book clubs that proliferated through the 1990s, says Jessica Bearman, deputy director at the Forum on Regional Associations of Grantmakers - "a desire for community, but, at the same time, this American desire to do things on your own. It's both collective and independent."

Women's role in giving

As a cultural catalyst, the sewing circle is rooted in the efforts of lay women who worked through their churches and ladies auxiliaries to meet parishes' needs. With conversations set to the rhythm of clicking needles, the groups began popping up in the colonies as early as the mid-1700s.

Today, though, experts say many women have lost touch with the simple pleasures of potlucks, "down time," and exercising their communal instincts to do good, say some experts. Giving to friends' "pet projects" is one way to ensure that gifts aren't wasted or spent unwisely.

"With the proliferation of charities and charitable appeals coming down around us, it is difficult to make choices about which ones are best," says Linda Lampkin, who runs the National Center on Charitable Statistics at the Urban Institute. "Getting one person to do research and present it to 20 others in a pleasant environment is a more comforting way to do it."

For charities looking for money, women, especially, are a wellspring: Female entrepreneurs give 5.2 percent of their income to charity, compared to the 1.3 percent that large corporations typically donate, according to the Women's Funding Network. And in a 2003 Chronicle of Philanthropy study, single mothers with incomes over $50,000 gave about five times as much to charities as did men of similar incomes living on their own.

Recognizing this, the United Way sponsored a conference a few years ago called "Women's Impact on Philanthropy: Numbers too big to ignore."

In addition to reverberating in the halls of institutional philanthropy, giving circles are holding charities to new, more personal standards. Instead of taking applications, members scour their communities and come up with worthwhile endeavors that will have visible effects - a sort of democratization of giving.

"I know doggone well that [charities] are impressed," says Ms. Babb. "They call to apply, but I just say, 'Well, it's really our women who are searching for the right program, and if you've got it, I'm sure they'll find it.' "

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